INDIA: New Delhi-based telecom company Vodafone Idea Limited (VIL) has announced its decision to defer the payment of its annual 5G spectrum purchase installment by one month.
In a letter submitted to the Department of Telecommunications (DoT) on Tuesday, Vodafone Idea stated that it plans to avail the grace period of 30 days with interest for the payment of Rs 1,680 crore, originally due on August 17, 2023.
The delay in payment will be accompanied by the payment of interest, as per the terms outlined in the Notice Inviting Applications (NIA) dated June 15, 2022, for the spectrum auction.
The telecom giant had secured 5G spectrum through an auction in August of the previous year, investing a total of Rs 18,799 crore. Vodafone Idea had chosen a structured plan to settle its dues to the government in 20 equal installments. The initial payment of Rs 1,680 crore was made in August 2022.
Despite the delay in the spectrum payment, Vodafone Idea has been actively seeking ways to address its financial situation. In a separate filing on Monday, the company revealed that one of its promoters is prepared to infuse Rs 2,000 crore in the event of any financial requirement arising for meeting impending payment obligations.
In the company’s earnings report for the quarter spanning from April to June 2023, Vodafone Idea posted a loss of Rs 7,840 crore. However, the company reported a 3% sequential increase in Average Revenue Per User (ARPU), which rose to Rs 139.
The telecom firm also noted growth in its 4G customer base from 122.6 million to 122.9 million in comparison to the previous quarter. Nevertheless, during this quarter, Vodafone Idea experienced a decline of 4.5 million mobile subscribers, resulting in a user base of 221.4 million as of June 2023.
Vodafone Idea’s decision to delay the spectrum installment payment while offering interest underscores the complex financial landscape that telecom companies navigate as they balance investment in future technologies with immediate financial commitments.
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